India set to launch 2G spectrum auction

03 February 2014 | Sophie Donoghue


India’s telecoms industry is set to launch its 2G spectrum auction today despite a request from Vodafone and Bharti Airtel to delay the process, which was rejected by the Supreme Court.

India’s government is expected to generate approximately $1.8 billion from the auction, which could last a week.

Vodafone and Bharti Airtel, India’s largest operators by sales, hold licences in the 900Mhz band in Delhi, Mumbai and Kolkata which are set to expire this year. In an attempt to avoid having to rebid for the licences, they have been lobbying to stop the auction and to extend their licences.

The court refused the appeal arguing that operators do not have a monopoly on the spectrum and that an extension would scare off other potential bidders in the auction.

India’s telecoms industry has faced controversy in recent years after the Supreme Court cancelled over 100 mobile licences in 2012, following controversy and improper allocation, leading to numerous foreign players leaving the market.

Eight companies have signed up to bid in the new auction, which is aimed at promoting more investment in the industry, and eventually the launch of 4G services.

The news follows the announcement that Indian ministers have agreed to cap the fees telecom companies pay to use mobile frequencies at 5% of annual gross revenue. The new spectrum usage charge will apply only to the spectrum acquired at the auction.